Egan v Taylor (No. 2)[2022] QDC 179

DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   On 24 June 2022, I delivered reasons in respect of applications brought by the defendant Kara Taylor and by the first, second and third plaintiffs,^[1] which were heard together before me on 26 April 2022.
2. [2]
   The orders made were as follows:

1. Order under UCPR r 379 that the Further Amended Defence and Amended Counterclaim served 21 April 2022 be disallowed.
2. Order under UCPR r 16(e) that the Amended Counterclaim served 21 April 2022 be set aside.
3. Order for summary judgment under UCPR r 293 in favour of the first, second and third plaintiffs/cross defendants against the defendant/cross-claimant in respect of all of the Amended Counterclaim served 21 April 2022.
4. Order under UCPR rr 416 and 415(6)(a), (b) and (d) that the subpoenas for production issued by the defendant to the following be set aside: (i) John Payne; and (ii) Natasha Kocks.
5. Application by the defendant/cross-claimant dated 15 March 2022 be dismissed.

3. [3]
   I heard oral submissions on costs from Mr Polden for the first, second and third plaintiffs and Mr Burke for the eighth defendant to the counterclaim.  The defendant sought and was granted leave to provide written submissions.^[2]

Costs sought by the first, second and third plaintiffs

4. [4]
   Mr Polden, on behalf of the first, second and third plaintiffs, seeks costs on an indemnity basis in respect of the following:

1. (1)
   The costs of the counterclaim.

2. (2)
   The plaintiffs’ costs of the disallowed amendments of the defence.

3. (3)
   The application in respect of costs against a deceased person; security for costs; and the application seeking to hold John Payne and Natasha Kocks in contempt for failing to comply with subpoenas (including costs thrown away from the appearance on 15 March 2022).

5. [5]
   The defendant argues that any burden of a costs order, particularly on an indemnity basis, “would seem unreasonable”.^[3]
6. [6]
   In the alternative, the defendant submits that any orders for costs should be reserved until the final hearing.^[4]

The Law – costs

7. [7]
   The starting point in respect of costs in these matters are set out in the Uniform Civil Procedure Rules 1999 (Qld) (‘UCPR’) r 681 in the following terms:-

“681 General rule about costs

1. (1)
   Costs of a proceeding, including an application in a proceeding, are in the discretion of the court but follow the event, unless the court orders otherwise.

2. (2)
   Subrule (1) applies unless these rules provide otherwise.”

8. [8]
   Ordinarily costs will be ordered, and assessed, on a standard basis,^[5] but the court has a discretion to order costs be assessed on the indemnity basis.^[6]
9. [9]
   The leading authority on awarding indemnity costs is Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248, where the principles in respect of costs are set out as follows:-^[7]

“1.  The problem arises in adversary litigation, i.e. litigation as between parties at arm’s length. Different considerations apply where parties may be found to be entitled to the payment of their costs out of a fund or assets being administered by or under the control of a trustee, liquidator, receiver or person in a like position, e.g. a government agency or statutory authority.

2. The ordinary rule is that, where the court orders the costs of one party to litigation to be paid by another party, the order is for payment of those costs on the party and party basis. In this court the provisions of O 62, rr 12 and 19, and the Second Schedule to the rules will apply to the taxation. In many cases the result will be that the amount recovered by the successful party under the Order will fall short of (in many cases well short of) a complete indemnity.

3. This has been the settled practice for centuries in England. It is a practice which is entrenched in Australia. Either legislation (perhaps in the form of an amendment to rules of court) or a decision of an intermediate Court of Appeal or of the High Court would be required to alter it. No doubt any consideration of whether there should be any change in the practice would require the resolution of the competing considerations mentioned by Devlin LJ in Berry v British Transport Commission and Handley JA in Cachia v Hanes on the one hand and by Rogers J in Qantas on the other. The relevant passages from the respective judgments have been earlier referred to.

4. In consequence of the settled practice which exists, the court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the court in departing from the usual course. That has been the view of all judges dealing with applications for payment of costs on the indemnity or some other basis whether here or in England. The tests have been variously put. The Court of Appeal in Andrews v Barnes (39 Ch D at 141) said the court had a general and discretionary power to award costs as between solicitor and client as and when the justice of the case might so require’’. Woodward J in Fountain Selected Meats appears to have adopted what was said by Brandon LJ (as he was) in Preston v Preston ([1982] 1 All ER at 58) namely, there should be some special or unusual feature in the case to justify the court in departing from the ordinary practice. Most judges dealing with the problem have resolved the particular case before them by dealing with the circumstances of that case and finding in it the presence or absence of factors which would be capable, if they existed, of warranting a departure from the usual rule. But as French J said (at 8) in Tetijo: the categories in which the discretion may be exercised are not closed’’. Davies J expressed (at 6) similar views in Ragata.

5. Notwithstanding the fact that that is so, it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors v Weekes (1989) 92 ALR 131 at 152); evidence of particular misconduct that causes loss of time to the court and to other parties (French J in Tetijo); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp); the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davies J in Ragata); an imprudent refusal of an offer to compromise (eg Messiter v Hutchinson (1987) 10 NSWLR 525; Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724 (Court of Appeal); Crisp v Kent (SC(NSW)(CA), 27 Sept 1993, unreported) and an award of costs on an indemnity basis against a contemnor (e.g. Megarry V-C in EMI Records). Other categories of cases are to be found in the reports. Yet others to arise in the future will have different features about them which may justify an order for costs on the indemnity basis. The question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis.

6. It remains to say that the existence of particular facts and circumstances capable of warranting the making of an order for payment of costs, for instance, on the indemnity basis, does not mean that judges are necessarily obliged to exercise their discretion to make such an order. The costs are always in the discretion of the trial judge. Provided that discretion is exercised having regard to the applicable principles and the particular circumstances of the instant case its exercise will not be found to have miscarried unless it appears that the order which has been made involves a manifest error or injustice.” [citations deleted].

10. [10]
    In Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd & Ors (1988) 81 ALR 397, Woodward J noted:-

“I believe that it is appropriate to consider awarding ‘solicitor and client’ or ‘indemnity’ costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law. Such cases, fortunately, are rare. But when they occur, the court will need to consider how it should exercise its unfettered discretion.”

11. [11]
    In 11 Oonoonba Road Pty Ltd & Ors v ACP Properties (Townsville) Pty Ltd & Ors [2022] QCA 87 [52] Morrison JA identified that “misconduct or inappropriate conduct in the course of the litigation” and an assessment “that the claim had such a remote prospect of success that proceedings should not have brought or continued” were both “classic categories affecting the exercise of discretion to award costs on the indemnity basis.”^[8]
12. [12]
    The fact that the losing party is self-represented does not preclude an order for indemnity costs. As the Victorian Court of Appeal noted in Karam v Palmone Shoes Pty Ltd [2012] VSCA 97:-^[9]

“… the appellant is self-represented and it is perhaps just conceivable that he honestly believed that these applications stood some chance of success.  But even if he did, a self-represented litigant cannot be allowed forever to stand behind the shield of his own ignorance; especially when it continues to subject other parties to cost and inconvenience and to add pointlessly to the load on the court’s already limited resources.  There comes a point at which a self-represented litigant must be required to take responsibility for his choices...”

 Discussion

13. [13]
    In the decision in this matter,^[10] I identified in respect of the counterclaim,^[11] that there was no capacity for a court to extend the operational limitation period beyond the three years referred to in Limitations of Actions Act 1974 (Qld) s 32A(2).  It is clear, therefore, that the defendant’s counterclaim could never succeed, and accordingly it was set aside, with an order for summary judgment against the defendant/cross claimant.  As counsel for plaintiffs submits (with some strength) it was always “a hopeless case”,^[12] and identifies that the defendant/counterclaimant was clearly put on notice of the limitation issue by correspondence on behalf of the plaintiffs.^[13]
14. [14]
    Clearly, the defendant has comprehensively failed in all aspects of her application, and conversely the plaintiffs have been wholly successful in all aspects of their application.
15. [15]
    Applying the relevant test from the principles identified in the cases referred to in paragraphs [9] – [11] above, in particular Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd & Ors (1988) 81 ALR 397,^[14] it is apparent that the defendant has proceeded with the counterclaim in wilful disregard of the clearly established law in respect of the relevant limitation period.  In my view, that wilful disregard clearly justifies an order for indemnity costs in respect of the counterclaim, even though the defendant is self-represented.^[15]  Although, there are clear and obvious difficulties with the defendant’s approach to all other aspects of this litigation, I am not sufficiently persuaded that it is appropriate to award indemnity costs in respect of any other aspect of the orders I made on 24 June 2022. 
16. [16]
    Accordingly, I consider that the defendant should pay the plaintiffs costs on an indemnity basis in respect of the amended counterclaim served 21 April 2022 which was disallowed and set aside.  It follows that the defendant should pay the plaintiffs’ costs on the standard basis in respect of all other matters covered by orders (1) – (5) of the decision delivered 24 June 2022, including the costs thrown away in respect of the hearing on 15 March 2022. 
17. [17]
    In respect of the eighth defendant in the counterclaim, Aussie Helpers Charity Ltd, Mr Burke submitted that although his client might well be entitled to indemnity costs, he didn’t wish to pursue a claim for indemnity costs, but rather sought an order for fixed costs “in an amount of 4 or $5,000” which he submitted, and I accept, was significantly less than the quantum of costs his client had spent in defending the litigation to that point (estimated at $15,000).^[16]
18. [18]
    In those circumstances, it would seem appropriate to fix costs for the benefit of the eighth cross-defendant in the sum of $4,000.  In that respect, it should be noted that the counterclaim entirely failed as against all of the cross-defendants, including the eighth cross-defendant, in circumstances where the counterclaim, as previously indicated, could not possibly succeed.

Orders

19. [19]
    I make the following formal orders:

1. Order that the defendant pay the first, second and third plaintiffs’ costs in respect of the amended counterclaim served 21 April 2022 on the indemnity basis.
2. Order that the defendant pay the eighth cross-defendant, Aussie Helpers Charity Ltd, the sum of $4,000 in costs in respect of the amended counterclaim served 21 April 2022.
3. Order that the defendant pay the costs of the first, second and third plaintiffs on the standard basis in respect of all other costs in respect of the defendant’s application and the plaintiffs’ application to which the decision in this court delivered 24 June 2022 relates, including the costs thrown away of the hearing on 15 March 2022.